The Legal and Ethical Environment of Business
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Chapter 3
Litigation
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Learning Objectives
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Identify the parties involved in litigation
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Explore the role of lawyers in our adversarial system
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Understand the roles and obligations of jurors
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Explore the standing requirement
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Understand how a court obtains personal jurisdiction over the parties
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Learning Objectives
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Explore pretrial procedures such as pleadings, discovery, and motions
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Find out how class-action lawsuits are organized and prosecuted
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Learn about issues and challenges facing parties during discovery
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Learn about jury selection
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Follow a trial from opening statement to closing arguments
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Explore the public policy rationale for the trial system
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Introduction
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Few important terms:
– Prosecution: The government’s side in a criminal case
– Plaintiff: The party that starts a lawsuit
– Defense: The party that responds to a civil or criminal complaint
– Litigation: A lawsuit filed in court to determine liability and remedies
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The Parties Involved
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The litigation system relies on parties bringing forth and defending their
respective claims
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Litigants: Parties in litigation
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Occasionally, a court may act sua sponte
– Sua sponte: Latin for “of its own accord,” an action by a court without motion
by the parties
– Motion: Any request to a court for the court to take a specific action
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The Parties Involved
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The plaintiff is a victim that has presumably suffered some sort of legal
wrong that the law recognizes
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The plaintiff brings suit against the defendant - the alleged wrongdoer
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Many cases involve multiple plaintiffs and multiple defendants
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The Parties Involved
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Civil procedure encourages parties to air all their grievances against each
other at once
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All parties, and every possible claim arising out of a single incident or
series of related incidents, should be identified and named in a lawsuit
– Claim: Any legal right to seek a remedy for a wrong
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The Parties Involved
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Counterclaim: A claim by a defendant against the plaintiff
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Counterplaintiff: The original defendant in a lawsuit, when asserting a
claim against the plaintiff
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Counterdefendant: The original plaintiff in a lawsuit, when sued in return
by the defendant
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Third-party defendant: A third party brought into litigation by the
defendant on a claim that the third party shares potential liability
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Joinder: Joining of parties or claims in litigation
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The Parties Involved
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Parties hire attorneys to litigate most cases
Pro se: Latin for “on one’s own behalf,” a litigant representing herself
without an attorney
– pro se litigants and can only proceed pro se if the judge allows it
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Bar: A body of attorneys and judges
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Queen’s Counsel (QC): Special status conferred by the British Crown to
distinguished lawyers
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The Parties Involved
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Juris Doctorate: A professional degree and doctorate in law, required for
practicing law in the United States
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Reciprocity: Admission of an attorney into the state bar for meeting
minimum time practice requirements in another jurisdiction or state
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pro hac vice: Latin for “for this occasion,” a motion allowing out-of-state
attorneys to practice in-state for a specific case or matter
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The Parties Involved
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Civil attorneys work in two different categories
– In-house counsel: The attorney employed by and representing only one
enterprise
– Outside counsel: Law firm attorneys representing a company or other
enterprise
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Lawyers are required to comply with rules of professional conduct
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The Parties Involved
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The communications between a client and attorney are absolutely
confidential under the attorney-client privilege doctrine
– Attorney-client privilege: A doctrine that requires all communications
between client and attorney be kept secret by the attorney from any
disclosure to any person
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Privileges under the law
– Spousal privilege
– Doctor-patient privilege
– Priest-penitent privilege
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The Parties Involved
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A lawyer’s first duty is to the administration of justice
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A lawyer cannot tell anyone what the client has told him/her
– The lawyer is prohibited from knowingly suborning perjury
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The Parties Involved
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Types of juries
– Grand juries: A body of citizens examining whether someone accused of a
crime should be formally charged
– Petit juries: A body of citizens determining guilt or innocence in a criminal
trial, or liability in a civil trial
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Problems with the jury system
– Grand and petit juries are drawn from citizen voter and driver license rolls
– The burdens placed on jurors’ personal lives through their service
– The makeup of the jury itself
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Standing
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Article III of the Constitution grants the judiciary the power to hear
“cases” and “controversies”
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The standing requirement means that courts are unable to give advisory
opinions
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A party has to prove that it has an actual case to proceed
– The case should be brought at the right time
• Ripe: A claim ready for litigation
• Moot: A case is moot if granting the remedy asked would not help the plaintiff
– The case has to be brought by the right person
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Standing
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Standing doesn’t have anything to do with the merits of the case
– Being able to prove standing doesn’t mean that you can win the case at hand
– It means that you’ve been able to clear a procedural bar toward proceeding
with litigation
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Personal Jurisdiction
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It is a court’s jurisdiction over parties in litigation
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It is different from subject matter jurisdiction, which is the power of a
court to hear a case
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It requires litigants to have some form of minimum contacts with the state
where the case is filed
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Personal Jurisdiction
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It seeks to avoid inconvenient litigation, even if the case has actual merit
A court obtains personal jurisdiction over the plaintiff when the plaintiff
files its lawsuit
It is a constitutional requirement
– The due process clause of the Fourteenth Amendment requires government
processes to be carried out fairly
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Personal Jurisdiction
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Long-arm statutes: State laws allowing service of process on an out-ofstate defendant with some form of minimum contact with the state
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Service of process: The procedure to give legal notice to a litigant that a
court is exercising personal jurisdiction over that person
– Service of process requires a copy of the summons to be personally delivered
to the defendant or the defendant’s agent
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The Internet era has raised interesting personal jurisdiction issues
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Pretrial Procedures
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Complaint: A simple document setting forth who the parties are, the facts
of the case, and what specific laws the defendant has violated
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A complaint ends with a prayer for relief
– Prayer for relief: A claim by the plaintiff for damages sought from the
defendant
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Pretrial Procedures
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A plaintiff may seek damages, specific performance, or a temporary or
permanent injunction
– Damages: Loss suffered by plaintiff, typically expressed in terms of money
– Specific performance: A nonmonetary remedy available in certain cases
whereby the defendant is ordered to perform the specific act agreed to in a
contract
– Injunction: An order by a court to a party to do something or to stop doing
something
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Pretrial Procedures
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It is easier to get a temporary injunction in the early stages of litigation,
because courts don’t want to see the defendant take some action that
may result in irreparable harm
– Irreparable harm: A type of injury that cannot be corrected by money or by
putting things back to where they were
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Court systems have a set of rules to prevent the filing of frivolous suits
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Pretrial Procedures
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A complaint is filed with the clerk of the court
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The clerk will issue a summons to the defendant, along with a copy of the
complaint
– Default judgment: A judgment entered against a party for misconduct or
failure to answer
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Cases with a large number of plaintiffs
– Lead plaintiffs: In a class-action suit, the representative plaintiffs of the class
– Class-action: A lawsuit in which a representative plaintiff represents an entire
class of similarly situated plaintiffs against the defendant
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Pretrial Procedures
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The defendant must file an answer to the complaint within thirty days
The answer may contain an affirmative defense the defendant wishes to
pursue
– Affirmative defense: A defense that does not deny the defendant’s actions but
provides a reason or justification, such as self-defense
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Pretrial Procedures
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Pleadings: The complaint, answer, and any supporting documentation
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At any point in litigation, either party may file motions with the court
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The motions are designed to short-circuit the litigation and lead to an
early end to the lawsuit
– One such motion is the motion to dismiss for failure to state a cause of action
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Pretrial Procedures
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If a long period of time has passed since the incident in question and the
filing of the lawsuit, a defendant may file a motion to dismiss based on
the statute of limitations
– Statute of limitations: A defined time limit under which a legal action must
commence, or be forever barred
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In support of any motion, a party may submit an affidavit
– Affidavit: A sworn statement in writing made under oath
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Pretrial Procedures
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After pleadings are filed, the litigation moves into the discovery phase
– Discovery: A process in which each side finds out information about the other’s
case
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Discovery is designed to prevent trial by surprise, where either side may
suddenly produce a damning piece of evidence that allows it to win the
trial
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Pretrial Procedures
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Four types of discovery
– Interrogatory: Written questions posed by a party to another party during
discovery
– Request for production: A party can request the other party to produce
written communications
– Request for admission: A set of statements posed by one party to another for
purposes of having the other party admit or deny the statements, to narrow
the scope of facts to be tried
– Deposition: A statement by a party or witness made under oath
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Pretrial Procedures
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The policy behind liberal rules of discovery is to permit both sides to
prepare adequately for trial, in effect discovery is an expensive phase of
litigation
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During or after discovery, parties make a motion for summary judgment
– Summary judgment: A judicial order declaring a winner on the merits of a
case
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The Trial and Appeal
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Voir dire: The process of selecting a petit jury
– Voir dire begins with the jurors filling out a written questionnaire
– Attorneys quiz each potential juror in turn
– If an attorney does not like a juror’s response, that juror may be excused
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Two types of challenges to a potential juror:
– Peremptory: A challenge to a juror without giving a reason
– For cause: A challenge to a prospective juror for a good reason such as bias
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The Trial and Appeal
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After a jury has been selected and sworn in, the trial begins
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The plaintiff or prosecution begins by delivering an opening statement
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The trial then moves into the examination phase
– Jurors are presented with witnesses, called by each side, to give evidence
– Direct examination: Examination through questioning of a witness by the side
that called the witness
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The Trial and Appeal
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A court reporter maintains a record of all the words spoken in case there
is an appeal
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After direct examination, the other side has the right to conduct a crossexamination
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The attorney will try to discredit the witness to convince the jury that the
witness is not credible
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The Trial and Appeal
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Once the prosecution or plaintiff has called all its witnesses, and the
witnesses have undergone direct and cross-examination, then the
prosecution or plaintiff will rest its case
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The defendant may make a motion for a directed verdict
– Directed verdict: An action by the court to direct a verdict when a party has
failed to meet its burden of proof
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The Trial and Appeal
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After the defense has rested its case, the attorneys once again address
the jury in closing arguments
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The judge then charges the jury by giving the jury its instructions
– The instructions acquaint the jury with the relevant law
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The jury then retires to deliberate
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The Trial and Appeal
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Central to the jury’s deliberations is the burden of proof applicable to the
case
– Burden of proof: The responsibility of a party to produce sufficient evidence
to convince the trier of fact of a particular fact or issue
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The burden is to prove the defendant committed all the elements
required in the crime beyond a reasonable doubt
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In civil cases the burden of proof is preponderance of the evidence
– To prove a fact or issue is more likely than not true
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The Trial and Appeal
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During jury deliberations, the jurors are permitted to ask the judge for
clarification about the law and to request to see the evidence again
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Once the jury delivers its verdict, the losing side typically makes a motion
for judgment notwithstanding the verdict
– Judgment notwithstanding the verdict: A judgment setting aside the jury’s
verdict
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The Trial and Appeal
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Jury nullification: An act by a jury to willingly ignore the law to achieve
an equitable result or outcome
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If the judge denies the motion for judgment notwithstanding the verdict,
then the judge enters the jury’s verdict as a judgment
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Judgment: A formal determination of a matter by a court
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Execution: The collection or enforcement of a judgment
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The Trial and Appeal
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If the loser is unable or unwilling to pay the judgment, the winner can
petition the court to use its full legal resources
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The loser in litigation cannot refile a civil lawsuit once it has been decided
under the doctrine of res judicata
– Res judicata: The doctrine barring relitigation of issues and claims already
finally determined
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